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Introduction to World Economic Development

Herman Kahn

[A predecessor volume], The Next 200 Years, explored the theoretical feasibility of the proposition that while world population and gross world product cannot grow indefinitely at current rates, population should be able to increase by a factor of ten and gross world product by a factor of as much as one or two hundred without exceeding the intrinsic carrying capacity of the earth. However, we believe that the population and gross world product are likely to stabilize well below these levelsthe population at about two or three times that of today and the gross world product at perhaps twenty or thirty times its present size. The book tried to make plausible our conclusion that natural, social, political, and cultural forces were likely to slow the growth of both population and production long before the world encountered any fundamentally unmanageable problems of supply, pollution, or other side effects of the great 400-year transition.

The present volume examines the elements of change and continuity in both the advanced and developing economies that are shaping this Great Transition. It examines some of the more immediate problems and issues associated with the process of economic growth. In some ways it is an application, elaboration, and continuation of The Next 200 Years. The themes of both books are summarized in the statement that opens the first book:

Two hundred years ago almost everywhere human beings were comparatively few, poor, and at the mercy of the forces of nature, and 200 years from now, we expect, almost everywhere they will be numerous, rich, and in control of the forces of nature.

We still believe in that prediction—barring (an essential caveat) bad luck or bad management.

World Economic Development concludes that many widely accepted ideas about economic growth are outdated (if they were ever true), and that much of the pessimism that until recently has characterized the discussion of economic growth is unwarranted. Humanity should go ahead and take its chances despite the possibility of bad luck or bad management because the prospects are so exciting, because it is still probably safer to go ahead than to try to stop prematurely the growth process, and because it is impractical to do anything else. The attempt to “stop the world” might slow down the Advanced Capitalist nations for a while, but it would not change the historical trends much unless it created a disaster.

While this prognosis may seem optimistic when contrasted with most current literature, much of it is simply realistic. Our long-range projections may have a helpful impact on morale and commitment, but we are not in the business of trying to create or sell positive attitudes. All our conclusionsoptimistic and otherwiseare the results of our studies and considered judgments, and not of wishful thinking, political ideology, or an attempt to provide an inspirational message. We are not against such attempts; it is just not our business. (However, when our studies justify optimism, we are perfectly willing to use them to help raise morale and increase commitment.)

On the other hand, some of the short-run projections in this book may be regarded as pessimisticand perhaps rightly so. Such projections could also become self-fulfilling prophecies. However, they seem to us much more likely to result in greater realism in evaluating current issues, and thus become self-defeating prophecies. Again, except under extraordinary circumstances, it is not our business to worry excessively about creating self-fulfilling or self-defeating prophecies through our objective studies and observations. Our basic purpose is to devise and exposit policies that create desirable prophecies, but this is unlikely to be feasible if there is too great concern about facing unpleasant possibilities.

The future will not be problem free. We do not even rule out the possibility of an overwhelming catastrophe (the most significant being a large nuclear war). However, the future we envision as most likely will be characterized by gradually diminishing economic growth as a result of what are often called “social limits.” This is very different from drastically curbing growth to cope with (wildly exaggerated) supply and pollution crises, a solution often advocated by elites who are misinformed or misled by ideology and self-interest. The key long-term problems are more likely to be associated with personal affluence and affluent societies than with poor people and poor societies.

This book argues for rapid worldwide economic growth, for Third World industrialization, and for the use of advanced (or at least appropriate) technology. It suggests tactics and strategies to facilitate all of these objectives. We make no apologies for these positions. However, the desirability of increasing economic affluence and technological advancement is under such broad and intense attack today that some defense seems necessary. Indeed, so much smoke has been generated that many observers incorrectly believe there must be a raging fire.

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